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Cape Town - The range within which the rand traded for the most of last week - the R15.50/$ to R15.80/$ band - suggests that the currency was trading quite stable in the lead up to the US non-farm payroll number out on Friday, said Wichard Cilliers, director and chief dealer at TreasuryOne on Tuesday.

In his view, that is not entirely accurate as the rand even in seemingly tight ranges is still extremely volatile with no clear direction.

"Just as everybody was easing into weekend mode, the US non-farm payroll numbers came in and woke everybody from their pre-weekend slumber. The number overshot the estimated by close to 50 000 jobs and, generally, that would suggest the rand to run weaker at the speed of light," said Cilliers.

"That didn’t happen immediately, which was strange, but if we have learnt anything from 2016, it is that we live in odd times, and brace yourselves for even more unusual things to happen."

He described the rand as initially trading a bit stronger - against market expectations - only to weaken 20 cents in five minutes. He pointed out that this is what one would expect after a strong number - but only to "drop like an anchor" and close the week at R15.3500.

The cause could lie in the hourly wages being down by 0.1% in stark contrast to the headline number and showing the "shift from in the US economy psyche", where the headline number was the be all and end all last year.

"Now it’s more a case of substance and sustainability and concrete numbers before the Fed will hike interest rates again," said Cilliers.

Emerging market (EM) currencies have found "a good ally" in the oil price and the major moves of EM currencies currently correlate to the oil price.

"Whether the union is short-lived, only time will tell, but the fear is that the spike in oil is only temporary, as oversupply will still drive the price down in the medium term," said Cilliers.

"Whether EM currencies will divorce itself from the oil price should the price of oil fall, is a matter of speculation, but a lower oil price suggests a struggling world economy and a further run to safe havens."

For now, he expects this relationship to hold and in his view, to keep an eye on oil could help one see the potential path of the EM currencies.

With the rand trading below R15.50/$, with some comfort at the moment, it might be prudent to start looking at hedging at this stage, in his view, as the overall sentiment for the rand in the long term is still negative.

"Expect the rand to test the R15.20/$ level during the week, but there will be some resistance trying to break through those levels. On the top side should data turn against the rand we can easily see R15.6000/$ in the middle part of the week," said Cilliers.